How to Compute Average Period of Customer Use for STRs
Compute average period of customer use by dividing total days rented during the year by the number of distinct customer stays. The average must be 7 days or less to qualify under Treas. Reg. 1.469-1T(e)(3)(ii)(A). Compute at the activity level (typically per property) using Airbnb/Vrbo booking data exported and archived.
Track every booking
For each customer stay during the year, record check-in date, check-out date, and customer identifier (or anonymous booking ID). Airbnb and Vrbo platforms provide booking exports that include these fields.
Include every distinct stay even if the same customer returns multiple times during the year. Each stay is one observation in the average computation.
Compute the average
Sum the days rented across all stays. Divide by the number of stays. The result is the average period of customer use.
Example: 200 total nights rented across 50 distinct stays. Average is 4 nights. Passes the 7-day rule. Example: 200 nights across 20 stays. Average is 10 nights. Fails the 7-day rule.
Edge cases
Multi-property activities: compute at the activity level. If a taxpayer has aggregated multiple properties under Section 469(c)(7)(A), the average is across the aggregated activity. Without aggregation, compute per property.
Long off-season bookings: a single 30-night stay in a property otherwise rented in 3-4 night blocks can push the average above 7 nights. Monitor throughout the year.
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Zawwad Ul Sami, Founder
Zawwad Ul Sami is the founder of WeCostSeg, a founder-led cost segregation firm serving real estate investors across the US. He focuses on strategy, pricing, and the firm's overall direction.